Upstage AI Model Evaluation Faces Fairness Controversy Over Policy Favoritism Allegations

Ahead of the second evaluation for its proprietary Artificial Intelligence (AI) foundation model development project, dubbed 'Dokpamo', controversy over policy support for a specific company has escalated into a fairness debate, emerging as a key variable for the assessment. Some in the industry are raising concerns about the project's fairness, pointing to allegations that government support has been concentrated on a particular company.

The controversy surrounding former Blue House AI Future Planning Secretary Ha Jung-woo's ownership and disposal of Upstage stock has spilled into political discourse, coinciding with the election season. In response, Upstage CEO Kim Sung-hoon clarified that he divested his shares after taking public office and stated that the shares in question were not his personal property.

The controversy reignited on April 30th when the Financial Services Commission's 'National Growth Fund' decided to invest 560 billion KRW in Upstage. The industry is questioning the appropriateness of policy financing being directed towards a startup experiencing persistent operating and net losses. The Financial Services Commission cited Upstage's continuous revenue growth, its AI model development capabilities, the competitiveness of its R&D personnel, and its global pipeline acquisition as grounds for the investment.

Competing consortia have expressed concerns about the concentration of policy funds on a specific company. Upstage maintains that the Dokpamo project and the external controversies are separate matters. They argue that the Dokpamo project is largely driven by pure technological competition, and the evaluation is based on quantitative benchmarks, leaving little room for external issues to interfere. Upstage explained that the structure involves participating companies developing their own AI models with GPU support, and ultimately, the core lies in the performance demonstrated through quantitative benchmarks. The industry generally agrees that the final evaluation is likely to focus on the technical outcomes.